WASHINGTON (Dow Jones)--The National Association of Securities Dealers fined and suspended two Credit Suisse First Boston Corp. (Z.CSF) executives for failing to supervise and prevent the firm from receiving excessive commissions in exchange for allocations of "hot" initial public offerings.
In a press release Thursday, the NASD said J. Anthony Ehinger, Credit Suisse's global head of equity sales, and George W. Coleman, the firm's institutional listed sales trading head, were fined $200,000 each and both suspended for 60 days.
The NASD said the fines and suspensions are related to January enforcement actions in which the NASD and the Securities and Exchange Commission fined CSFB $100 million for extracting tens of millions of dollars from customers in inflated commissions that amounted to a "profit sharing" arrangement for allocations of "hot" IPOs.
The NASD said it determined that CSFB's IPO profit sharing practice was widespread, affecting more than 300 accounts serviced by the firm's Institutional Sales Trading Desk, its Private Client Services Group and its PCS Technology Group. Ehinger supervised all three units and Coleman, who reported to Ehinger, supervised the Institutional Listed Sales Trading Desk.
A Credit Suisse First Boston spokesperson wasn't immediately available for comment.
The NASD found that the departments under Ehinger and Coleman's supervision executed thousands of transactions with excessive commissions, influenced CSFB's IPO allocations to customers who paid excessive commissions, and developed reports tracking both the amount of commissions paid by customers, as well as their IPO profits.
Separately, the NASD also suspended four former CSFB employees for one year and fined them $30,000 each for failing to provide the NASD with timely testimony in this matter. Scott M. Brown, Richard Scott Bushley, Michael S. Grunwald and John E. Schmidt were all employed in the firm's PCS Technology Group in San Francisco.
In settling these matters, all respondents neither admitted nor denied the allegations.
